Blue Point Trading Market View – June 07, 2013
The French solution – kill small business. French President François Hollande’s socialist government has come up with another brilliant idea. The idea is to destroy some 900,000 people benefiting from a law passed under former President Nicolas Sarkozy that eases bureaucracy and tax conditions on those setting up their own small businesses – auto-entrepreneurs. This was one the few things Sarkozy did right.
In September, France is set to increase social charge payments for these folks, set a time limit of 2 years that one can have this business status, reduce the amount one can make to qualify for this business status and stifle any potential innovation. As from these micro business can grow new companies. In short Hollande wants to kill off small business in favor of large enterprises and government workers (functionaries). Whether politicians are from the left or right, though they each have different approaches, both seem to want to kill off the little guy and give all favours to big corporations and big governments. They know where their bread is buttered. Large protests are planned, but most these folks have little political clout – the outcome is inevitable.
The reason for this new law, is that some have said that some businesses, such as language schools and small snack shops (now here are businesses we need to control), are using auto-entrepreneurs for work when there should be a company payroll – with more social charges being paid. But official figures show auto-entrepreneurs account for just 0.23 per cent of national output, with 90 per cent of auto-entrepreneurs earning less than the minimum wage. Hardly worth taxing these hordes of poor people and putting them out of business. Most of these businesses or even so-called hidden job posts, are simply not viable under any other business regime.
This business regime is however, soaking up large numbers who would otherwise join the growing unemployment lines. Way to go France, let’s see if we can get your 12% unemployment rate even higher by adding another 900,000 people to the already large 3+ million list of unemployed. Oh well, now they can go on the government dole (€426 per month for single person, €726 for a family of three, plus 56% of your home rent paid and 100% free medical). It’s not so much the lost economic output, rather the increased social charges that will now be borne by the government. France is sinking and stories like this do not bode well for the future of France nor the EU. Incredibly stupid … like shooting yourself in the head.
Daily Market View: (click here for the video)